Electric power suppliers are burdened with the need to meet extreme peak demands that are many times the average power demand. The requirement of meeting peak electricity demand drives the need for a large portion of power generation capacity. For this reason, shaving or reducing peak demand is of utmost interest to utility providers and energy managers. Peak demand can be mitigated by reducing demand through more efficient use of electricity by consumers during peak demand periods. Peak demand may also be mitigated by time-shifting electricity usage from a peak demand period to an off-peak period.
Early efforts to mitigate peak demand include time or use pricing in which electricity prices are variable based on the time of use or the type of use. Electricity rates that vary based on the time of usage are now common in many areas. Electricity rates that vary based on the type of use, such as business use, residential use, agricultural use, etc., are also common. These type-of-use scenarios are typically implemented by using individual power meters and accounts for specific applications, such as a business location, an irrigation pump or a residential home.
Recent advances in electric power distribution provide the ability for a power distribution network to send data to end-user equipment to help mitigate peak demands. This data may include power pricing data such as current electricity rates. A local user may use this rate data to schedule electricity usage events to take advantage of lower rates. These systems use the market system and the price of power to incentivize to use of power at off-peak times and discourage use during peak demand periods.